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Paradise Papers: Dear Tim Cook

projekte.sueddeutsche.de

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Re: Paradise Papers: Dear Tim Cook

#491

Post by germanier »

valuearb wrote: post #393
germanier wrote: post #371

Earlier quoted context omitted.

It's perfectly OK if that company actually operates in that country. It is not OK if the only presence they have is a mailbox and the actual act of operation is done somewhere else. A taxation race to the bottom is not what the fundamental principles of the EU are about. At best they are an unwanted side-effect.

No you are missing the point of the EU. No company should be forced to base in a country to sell there. Apple pays huge amounts of taxes in Germany despite not being based there. It just doesn’t pay much “income tax” because it’s not based there.

No, I understand the purpose just fine. It isn't about taxes at all. All EU tax rules were just bolted on to fix the most obvious unfair results of other regulation.

For example, I am customer of a German branch of a French bank. The company is based in Paris and all contracts clearly state that. The actual service is provided from a German office building. That's where almost all employees responsible for the German customers are located and where you sent letters to. That company pays "income" tax according to German rules to the German government for all services provided from that building even though it's based in France. (Surely they do some tax avoidance as well but this doesn't change the point.) Thanks to the EU freedoms they could just open up an office in Germany, employ people there, and provide services.

I am also a customer at a Dutch bank based in Amsterdam and that's where the service is provided from. They don't have a presence in Germany and don't pay German taxes. Thanks to the EU freedoms they can provide services to me across the border.

(For the record: Apple does have legal entities in Germany. For every transaction they just happen to use the most tax-efficient entity of theirs without much consideration of the real-life transaction.)

Re: Paradise Papers: Dear Tim Cook

#492

Post by akoncius »

slimshady94 wrote: post #286
belorn wrote: post #274

Earlier quoted context omitted.

Not only do they get tax cuts and cheap real estate from governments, they also get direct money. When google decided to create a data center in Sweden, the Swedish government gifted them $20 million in "establishment support". Money sent from the tax payer directly to the bank account of Google. Reason? So that google would pick Sweden. The politicians argument is that Sweden grain prestige if google has their data…

Wouldn't that increase the number of highly skilled individuals working in Sweden, who pay more tax/increase the jobs available? Which is a good thing?

how many employees are hired in such data centers?

Found article [1]: "Now, news outlet DT cites sources which have told the publication that Google was in fact the international web player readying to set bases at the Horndal campus and generate up to 300 permanent jobs."

So $20mm to create 300 jobs? I wouldn't say that ROI is very good in this case. Of course, there were some one-time employment such as contract for building data center and so on, but still I don't see it as a good investment.

Another data center example [2]: "Facebook will build a $750 million data center in the tony northeast Columbus suburb." ... "Peterson expects to employ about 100 workers at the data center."

And for that , government gave Facebook this: "Facebook has a 30-year property tax break on its land, 345 acres on Ohio 161, New Albany Mayor Sloan Spalding said. From the state, Facebook scored a 2-percent, 10-year Job Creation Tax Credit and a 100-percent and a 15-year data center sales tax exemption."

I don't see it as a fair deal for 100 new job positions.

[1]: https://data-economy.com/google-set-follow-facebooks-footste...

[2]: http://www.cleveland.com/open/index.ssf/2017/08/facebook_to_...

Re: Paradise Papers: Dear Tim Cook

#493

Post by mattmanser »

daxelrod wrote: post #328
mattmanser wrote: post #64

Earlier quoted context omitted.

In the UK, for example, you have to register any tax avoidance scheme that you're using (as an individual at least). If the HMRC then look into that tax scheme and deem it against the rules, you pay the tax, but without penalty. As I understand it, if you don't register the scheme and you are found to be using the previously grey-area avoidance scheme, then you get done for tax evasion. That's how it's supposed to wo…

I'm super curious about how this works in practice. What's the bar something has to meet before being reported? Do decisions made about how to do accounting count? How about decisions when filling out tax forms? (US example: itemizing deductions vs taking the standard deduction).

https://www.gov.uk/guidance/tax-avoidance-an-introduction

Re: Paradise Papers: Dear Tim Cook

#494

Post by balabaster »

arethuza wrote: post #485
balabaster wrote: post #479

Earlier quoted context omitted.

Would you not make use of a tax break even if you taking it harmed your neighbour? Everyone's response would be "It may suck for you that you can't leverage that loophole, but that person is not breaking the law." It's like the difference between claiming mileage vs. claiming vehicle rental/gas for work trips. You're not breaking the law by claiming one over the other, you're leveraging the framework to greater effec…

J.K Rowling, author of the Harry Potter books and who is fairly wealthy has an interesting moral stance on paying tax: "... I am indebted to the British welfare state; the very one that Mr. Cameron would like to replace with charity handouts. When my life hit rock bottom, that safety net, threadbare though it had become under John Major’s Government, was there to break the fall. I cannot help feeling, therefore, that…

Another reason I think she's an amazing woman to look up to and aspire to be like... but I'm not making 7 figure royalty cheques. I'm paying the same taxes (give or take) as everyone else that can't afford to leverage West Indies tax shelters. In the meantime, I'm stuck utilizing tax loopholes that save me tens of dollars a year.

Re: Paradise Papers: Dear Tim Cook

#495

Post by monktastic1 »

It seems like a lot of people here are looking for "the" root of the problem, as though there is one person or small group of people or laws that could fix the whole mess. The truth is that we are pretty much all complicit in small ways that add up, and that complicity generally takes the same form: I want a little more for myself, and have a convenient blind spot when it comes to ways in which systems and processes help bias things in my favor.

Elsewhere it's been pointed out that there's no (non-arbitrary) way to distinguish a "tax loophole" from a "tax code." It's sort of an "I know it when I see it" thing. But how many of us have the courage to stand up and say "hey, this is unfair for others" vs "hey, this is unfair for me"?

Until that happens, this kind of thing will continue in a variety of forms that may seem unrelated but profoundly aren't. But something inside us is scared of giving up any ground.

So what's the solution?

Well, meditation and psychedelics are showing tremendous promise in awakening the sort of "universal empathy" and profound sense of fundamental safety and security that can shift the balance.

We can't get on that train fast enough.

Re: Paradise Papers: Dear Tim Cook

#496

Post by n4r9 »

fastball wrote: post #457
n4r9 wrote: post #154

Earlier quoted context omitted.

Why is the burden not on both? Both Apple and the graduates are profiting from the subsidised education.

Because a corporation is not a person? It's a collection of individuals, and if you are taxing all of the individuals fairly why do you need to tax the collective as well?

I feel like this is sliding towards a debate about the virtues of corporation tax full stop, which is a slightly different matter.

I actually think the idea of a moral burden could reasonably be extended to entities such as corporations, but let's put that to the side for now.

At some point in the process a decision was made - collectively, by people - to avoid paying the stipulated rate of tax in countries in which Apple had profited. These people benefit from the educational system in those countries, but they also reap rewards from tax avoidance. The moral burden lies somewhere. Tim Cook would have known about this decision if not played a role in it, in contrast to previous statements he has made. That is the hypocrisy highlighted in this article.

Re: Paradise Papers: Dear Tim Cook

#497

Post by mcguire »

tyingq wrote: post #240
loceng wrote: post #188

Earlier quoted context omitted.

These companies evading taxes are responsible for increased hardship and suffering of a society as well, leeching off of the nations they exist in, and being able to outcompete the honest organizations and people in them. The damages are far greater than the tax avoided. "They are doing it too" isn't a valid excuse either.

They aren't, for the most part, doing anything illegal though. They are using the existing laws to their best advantage. The fix for this can't be trying to appeal to their morals. It would have to be something else that just limits the legal choices. Edit: If you disagree, are you saying that shaming them into not doing this solely on some moral compass is the right fix? Does that scale?

And if the laws aren't favorable enough, they can have the laws changed.

Re: Paradise Papers: Dear Tim Cook

#498

Post by pavlov »

dijit wrote: post #473
pavlov wrote: post #465

Earlier quoted context omitted.

>... if those tax reduction schemes are legal many companies are legally bound by their stock holders to exploit them, or else be found negligent in their duties. That's not the case. There is no way a company's management could be sued for "gross negligence in tax planning". If shareholders are unhappy about this issue, their recourse is the same one that's always available to them: elect a new Board of Directors an…

What if they've done that already though. What if the reason big companies avoid tax is that the shareholders ensure someone values fiscal results over supporting the country they earned the finance in is in the directors chair.

Yes, that's exactly why American corporations do the things they do.

It's not a legal obligation though. Shareholders could choose to have corporations managed differently. That kind of "pro-tax" activist shareholders don't exist, but it's not inconceivable that large public funds (pensions etc.) could become such.

Re: Paradise Papers: Dear Tim Cook

#500

Post by jchrome »

tyingq wrote: post #240
loceng wrote: post #188

Earlier quoted context omitted.

These companies evading taxes are responsible for increased hardship and suffering of a society as well, leeching off of the nations they exist in, and being able to outcompete the honest organizations and people in them. The damages are far greater than the tax avoided. "They are doing it too" isn't a valid excuse either.

They aren't, for the most part, doing anything illegal though. They are using the existing laws to their best advantage. The fix for this can't be trying to appeal to their morals. It would have to be something else that just limits the legal choices. Edit: If you disagree, are you saying that shaming them into not doing this solely on some moral compass is the right fix? Does that scale?

The more interesting fact is that if Tim Cook were to pay more taxes, he'd be fired by his shareholders. CEO's of public companies are supposed to increase profitability, not decrease it.
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